Last Update 11 Dec 25

Fair value Increased 29%

SGHT: Final Medicare Coverage Will Shape Dry Eye Outlook And Execution Risks

Analysts have modestly raised their price target on Sight Sciences from approximately $6.08 to about $7.85 per share, citing improved fair value estimates and expectations that finalized Medicare coverage for the TearCare dry eye treatment system could drive future outperformance.

Analyst Commentary

With the recent coverage decisions for TearCare by key Medicare administrative contractors, Street research has become more constructive on Sight Sciences' medium term outlook, though some execution risks remain in focus.

Bullish Takeaways

Bullish analysts argue that finalized Medicare coverage meaningfully de risks reimbursement uncertainty for TearCare, supporting higher revenue visibility and a higher justified price target.
The new coverage policies are viewed as a potential inflection point for procedure volumes. This could accelerate top line growth and improve operating leverage over the next several quarters.
Improved payer support is seen as validating the clinical and economic value proposition of TearCare. This could strengthen physician adoption and competitive positioning in the dry eye treatment market.
Some models now factor in a faster ramp in utilization, leading to upward revisions in fair value estimates as long as management executes on commercial expansion and provider education.

Bearish Takeaways

Bearish analysts caution that while coverage is in place, the pace of actual utilization uptake at the practice level may be slower than bullish scenarios assume.
There is concern that broader dry eye treatment competition and evolving reimbursement dynamics could cap pricing power and limit margin expansion despite higher expected volumes.
Execution risk around scaling the sales force, training providers, and navigating real world billing processes could lead to volatility in quarterly results and constrain near term valuation upside.
Some remain wary that the recent price target increase already reflects a substantial portion of the anticipated coverage benefit, leaving less room for error if growth underperforms expectations.

What's in the News

Sight Sciences raised its full year 2025 revenue guidance to a range of $76.0 million to $78.0 million, narrowing the expected year over year decline to 2% to 5% from prior guidance of $72.0 million to $76.0 million (Corporate guidance).
The company announced jurisdiction wide Medicare pricing for CPT code 0563T, covering TearCare procedures in Novitas and First Coast Service Options regions that account for roughly 30% of Medicare fee for service lives, which improves reimbursement clarity for providers (Product related announcement).
Alison Bauerlein was promoted from Chief Financial Officer to Chief Operating Officer. James Rodberg was appointed Chief Financial Officer, formalizing a new leadership structure with deep medtech and finance experience (Executive changes).
New published data from a large retrospective study of nearly 13,000 African American eyes showed higher intraocular pressure reductions and a greater share of patients achieving at least a 20% IOP reduction with OMNI compared with other MIGS options, reinforcing OMNI’s clinical differentiation (Product related announcement).
A systematic review and meta analysis in the European Journal of Ophthalmology reported that the OMNI Surgical System delivers sustained, clinically meaningful reductions in intraocular pressure and medication use, with slightly higher quality adjusted life years compared with iStent inject, driven by a favorable safety profile (Product related announcement).

Valuation Changes

Fair Value Estimate has risen meaningfully from approximately $6.08 to about $7.85 per share, reflecting higher expected long term returns under the updated assumptions.
Discount Rate has edged down slightly from about 7.92% to roughly 7.88%, implying a modestly lower perceived risk profile in the updated model.
Revenue Growth remains essentially unchanged at approximately 13.0% annually, indicating stable top line expectations despite other valuation adjustments.
Net Profit Margin forecast has been trimmed modestly from about 13.38% to roughly 12.91%, suggesting slightly more conservative profitability assumptions.
Future P/E multiple has increased significantly from around 29.7x to about 39.7x, indicating a higher valuation being ascribed to the company’s projected earnings base.

Expanding chronic eye disease prevalence and innovation in minimally invasive solutions are driving strong demand, higher utilization, and opportunities for accelerated growth and margin expansion.
A large unreached market for dry eye therapy and anticipated regulatory milestones position the company for significant future growth in revenue and market share.
Limited reimbursement, regulatory and tariff headwinds, heightened competition, and over-reliance on a narrow portfolio threaten both growth prospects and the path to profitability.

Catalysts

About Sight Sciences

An ophthalmic medical device company, focuses on the development and commercialization of surgical and nonsurgical technologies for the treatment of eye prevalent diseases.What are the underlying business or industry changes driving this perspective?

The company is positioned to benefit from increasing global prevalence of chronic eye diseases, such as glaucoma, driven by aging populations and expanding healthcare access-catalyzing sustained multi-year growth in device demand and top-line revenues.
There is strong ongoing momentum for Sight Sciences' minimally invasive solutions (OMNI and OMNIEdge), leveraging the industry shift toward less invasive surgeries that promote faster recovery, support higher procedure volumes, and could drive both revenue growth and improved operating margins.
Management has built a scalable commercial infrastructure and deep surgeon relationships, leading to record-high ordering accounts and sequentially increasing utilization rates-trends that, once market headwinds abate, are likely to accelerate recurring sales and gross margin expansion.
Large, untapped market opportunity in reimbursed interventional dry eye therapy (TearCare), supported by robust, recently-published long-term clinical and cost-effectiveness data-once reimbursement is secured, this is expected to be a major growth catalyst for both revenue and earnings.
Recent investments in pipeline innovation (e.g., iterative OMNI platform improvements and ongoing R&D projects), alongside pending regulatory and payer coverage decisions, position the company to capitalize on future technological adoption trends and increase market share, supporting a rerating of valuation multiples on sustained earnings growth.

Sight Sciences Earnings and Revenue Growth

Sight Sciences Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Sight Sciences's revenue will grow by 10.9% annually over the next 3 years.
Analysts are not forecasting that Sight Sciences will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Sight Sciences's profit margin will increase from -64.2% to the average US Medical Equipment industry of 12.5% in 3 years.
If Sight Sciences's profit margin were to converge on the industry average, you could expect earnings to reach $13.0 million (and earnings per share of $0.23) by about September 2028, up from $-49.0 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 24.3x on those 2028 earnings, up from -4.1x today. This future PE is lower than the current PE for the US Medical Equipment industry at 28.6x.
Analysts expect the number of shares outstanding to grow by 3.18% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.91%, as per the Simply Wall St company report.

Sight Sciences Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Ongoing lack of reimbursement coverage and uncertain timing for payer approval of the TearCare technology in the Dry Eye segment could severely limit revenue recovery in that business and delay reaching overall profitability, especially as current guidance does not factor in positive coverage in 2025.
Declining Surgical Glaucoma segment revenue versus prior year (down 5% year-over-year in Q2 2025) and persistent headwinds from Medicare LCD coverage restrictions, which limit the use of multiple MIGS procedures, may pose sustained challenges to revenue growth and reduce momentum in Sight Sciences' core business.
Competitive intensity remains high, with new entrants and established players launching rival MIGS products, potentially threatening Sight Sciences' market share gains and pressuring both revenues and average selling prices over the long term.
Elevated tariffs on imported products from China and shifting global trade dynamics result in tangible cost of goods sold increases ($1 million to $1.5 million expected in 2025 for Surgical Glaucoma), with ongoing uncertainty around future tariff rates, which may further erode gross and net margins.
Heavy dependence on a narrow portfolio (OMNI and TearCare), combined with the risk of new evidence challenging clinical differentiation or payer coverage, means any disruption, unfavorable regulatory changes, or pipeline setbacks could impair long-term revenue growth and push out the company's path to profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $4.417 for Sight Sciences based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $5.0, and the most bearish reporting a price target of just $4.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $104.1 million, earnings will come to $13.0 million, and it would be trading on a PE ratio of 24.3x, assuming you use a discount rate of 7.9%.
Given the current share price of $3.8, the analyst price target of $4.42 is 14.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Expanding Healthcare Access And Chronic Eye Disease Trends Will Boost Minimally Invasive Procedures